GDP is known as the acronym for “Gross Domestic Product” is the monetary value of all goods and services produced in a given region, during a given period, usually one year. As a popular slang, GDP is one of the most used indicators in the macroeconomy since its main objective is to measure economic activity, taking into account only the goods and services produced within the formal economy of a given territory regardless of the origin of the companies, excluding everything that occurs in the context of the informal economy, or illegal business.

To analyze the behavior of a country’s GDP, it is necessary to differentiate nominal GDP, real GDP and GDP per capita.

  • Nominal GDP is characterized by value or current market prices of goods and services produced in a given time. When it is indicated that current prices are taken into account, they are those that are established in the goods and services at the time of determining the GDP, which are often affected by inflation or deflation, and in this context experts suggest taking Real GDP counts.
  • Real GDP is calculated by the constant price of final goods and services produced in a country. Constant prices are calculated from a base – year that allows eliminating changes that arise in prices as a result of inflation or deflation.
  • GDP per capita is the division of GDP by the number of inhabitants of a country. The respective indicator as a measure of social welfare or quality of life of the inhabitants that make up a country is strongly criticized because it ignores the economic inequalities that exist between the inhabitants since it attributes the same level of income to all.

GDP is calculated as flow of expenses or income flow. In the first case, the following indicators are taken into account:

  • The consumption of goods and services acquired by family and businesses.
  • Investment especially by companies.
  • Public expenditure acquired by the Public Administration, in this context the salaries of public officials are also included.
  • The result of exports – imports.

However, as income distribution, it is taken into account: salaries, rents, taxes (VAT, income received by the State), benefits received by the owners of the company, and depreciation.

In relation to the results that may arise in the calculation of GDP, if the GDP of a country increases indicates an increase in the production of a country, as well as an increase in economic investment. Also, a GDP growth represents income for the government through taxes, therefore, the role of the State in the economic strengthening of a country and providing security and conditions for the investment of new businesses and growth is of utmost importance. of the existing ones.


The GDP includes the income generated by foreign citizens who work in the country, but not the nationals of the country who work abroad as it will be calculated in the GDP of the other country. For its part, the GNP is the income generated by the citizens of one country, and by the citizens of the same country that is in another, and excludes foreigners who live in the country.

  • slide What is Slide? - A slide is a photograph that is created on a transparent material. This is a positive print, presenting true colors, developed using a photochemical process. The traditional slides were obtained from the cutout of the frames of a film. These...
    Read more
  • detoxification What is Detoxification? - The Royal Spanish Academy (RAE) does not include the term detoxification in its dictionary. The notion is often used to refer to the neutralization and elimination of toxins (a toxic or harmful substance produced by a living being). In the...
    Read more
  • Designation What is Designation? - Designation, from the Latin designatĭo, is the action and effect of designating. This verb refers to point out or allocate someone or something for an end, to indicate or to name. For example: “The appointment of the coach will take...
    Read more
  • Embezzlement What is Embezzlement? - Embezzlement is the act and result of embezzling. This verb, coming from the Italian word defalcare, alludes to appropriating funds that had to be guarded or managed. Action can also refer to taking away someone’s trust or favor. Embezzlement occurs...
    Read more
  • Preposterous What is Preposterous? - The concept of preposterous, which derives from the verb preposterous, alludes to what is unusual, crazy or absurd. The term can refer to an expression, a situation, an action or a project, to name a few possibilities. Based on the...
    Read more
  • Agricultural Law What is Agricultural Law? - AGRICULTURAL LAW Law (from the Latin directum) is made up of the postulates of justice that constitute the normative and institutional order of a society. It is the set of rules that allow to resolve social conflicts. The agrarian, on...
    Read more
  • Dengue What is Dengue? - Dengue is the name of a contagious and epidemic -type disease that is caused by a virus transmitted by Aedes aegypti or Aedes albopictus mosquitoes, which have their habitat in accumulations of water. Dengue symptoms include fever, pain in the...
    Read more
  • STRING What is String? - String is a term that comes from the Latin chorda, although its most distant etymological origin is found in the Greek language. The concept is usually used to name the product formed by the union of various threads that is...
    Read more
  • QUADRANT What is Quadrant? - The first thing we are going to do, before discovering the meaning of the term quadrant, is to know its etymological origin. In this case, we can state that it derives from Latin, exactly from “cuandrante”, which can be translated...
    Read more
  • ECONOMIC CRISIS What is Economic Crisis? - The economy (a term that comes from the Greek language and means “administration of a house or family” ) is the science that studies the processes of production, exchange and consumption of goods and services. A crisis, on the other...
    Read more